New Fair Payment Code launched to help small businesses

Get recognition for paying on time with the Fair Payment Code

The Office of the Small Business Commissioner (OSBC), on behalf of the Department for Business and Trade, has launched the new Fair Payment Code. The initiative aims to promote timely payments and improve cash flow for small businesses across the UK.

What's new?

Replacing the previous Prompt Payment Code, the new Fair Payment Code introduces a more robust, ambitious approach to encouraging businesses to pay their supplier invoices on time.

With a clear tiered structure, businesses will now be awarded Gold, Silver, or Bronze status depending on their payment practices. The award categories are designed to recognise and encourage best practices in payment performance:

• Gold Award - for businesses that pay at least 95% of invoices within 30 days
• Silver Award - for businesses that pay at least 95% of invoices within 60 days, with a commitment to pay 95% of invoices to small businesses within 30 days
• Bronze Award - for businesses that pay at least 95% of invoices within 60 days

Each business awarded an Honour must also adhere to the Fair Payment Code's principles of being clear, fair, and collaborative with their suppliers.

Why it matters

Late payments disrupt cash flow, which can harm small businesses. In 2023, 15% of small and medium-sized enterprises (SMEs) cited cash flow and late payments as major challenges. The new code aims to help businesses by encouraging faster payments.

How to apply

Small businesses can now apply for Gold, Silver, or Bronze awards. Businesses must reapply every two years to maintain their award.

Applications for the 2025/26 awards are now open. Applications for the 2026/2027 awards will open from September 2025.

Signatories to the Prompt Payment Code do not automatically become Award holders. You must apply to the Fair Payment Code separately.  

Find out more about the Fair Payment Code.

The OSBC is hosting a series of webinars to support applications and answer questions about the Fair Payment Code. The webinars will take place between Wednesday 11 December and Wednesday 18 December 2024. Register now to join the one of the webinars.

First published 9 December 2024